Rather than remove performance reviews altogether, organisations should work to change the perceptions and language associated with performance reviews in order to deliver more positive outcomes, writes Arj Bagga
Whether you’re an employee or a manager, when it comes to performance reviews you either love them or hate them.
For those who have fallen out of love with performance reviews, the same three frustrations are often to blame:
- That performance reviews are retrospective and can bring up issues that have probably already been dealt with
- That reviews are a grudge task, we do them because we must, and because organisational processes tell us we have to
- That conversations focus on inputs (what employees did, how they did it) versus the outputs and what was achieved
Gartner data shows that a significant 61 per cent of managers believe the only reason their organisation conducts performance reviews is because of legal compliance requirements.
So yes, performance reviews get a bad rap. However, giving feedback is essential to achieving progress, so reviews have their merits too.
Organisations that choose to eliminate their reviews and ratings systems see employee performance decline by up to 10 per cent.
“The first step is to evolve numerical ratings to a descriptive rating system to help managers have positive conversations”
There’s an impact on managers too. While the lack of performance ratings may ‘take the pressure off’ managers in terms of time, they too also suffer as they are no longer as closely connected to their teams.
Gartner research shows that perceptions of manager conversation quality dropped 14 per cent for those without performance ratings and less than 5 per cent of managers are able to manage talent effectively without ratings.
Furthermore, certain employees thrive on feedback, particularly high-performing ones. To these individuals, recognition and feedback provides essential reinforcement of the contribution they’re making to the organisation and its success.
Organisations that removed performance ratings experienced a 28 per cent drop in the productivity of their high performers; the critical talent segment that organisations can least afford to disengage.
Performance reviews that are structured in the right way enable employees to better meet their objectives, add value to both the manager and their direct report and identify opportunities for career progression.
Rebranding performance reviews for impact
Rather than remove performance reviews altogether, organisations should work to change the perceptions and language associated with performance reviews.
“Providing more informal, ongoing feedback to employees throughout the year is a must”
The first step is to evolve numerical ratings to a descriptive rating system to help managers have positive conversations. This will also help to remove the stigma around performance management that exists because of a fear of judgment and assessment.
The next step is to think about what conversations will add value and enable a change in performance. Be prepared to discuss what training options are available, mentors who can expand knowledge and stretch challenges to spur development.
It’s also important to remember that performance goals shouldn’t be a ‘set and forget’ task. Goals should be visited quarterly to ensure they still align with the employee’s and organisation’s goals. Delivering work that isn’t clearly aligned to an organisational objective has shown to be a significant disengagement driver.
Finally, providing more informal, ongoing feedback to employees throughout the year is a must. Peer reviews can increase employee performance by 14 per cent. Organisations should help coach managers on how to provide proactive, action-orientated feedback to improve performance.
Now is the ideal time for organisations to take a step back and consider whether their performance and review process is benefitting and fulfilling the goals of the organisation, their managers and their employees.